Corp-Ethics.com - Report: Troubled Marsh & McLennan under SEC scrutiny

Company	Marsh & McLennan [Company Info]
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Date	Issue	Title
23rd Dec 2004	Fraud Investigation	Troubled Marsh & McLennan under SEC scrutiny

Report

The US stock market regulator is investigating troubled insurance broker Marsh & McLennan's shareholder transactions, the firm has said.

The Securities and Exchange Commission has asked for information about transactions involving holders of 5% or more of the firm's shares.

Marsh has said it is co-operating fully with the SEC investigation.

Marsh is also the focus of an inquiry the New York attorney-general into whether insurers rigged the market.

Since that inquiry was launched in October, Marsh has replaced its chief executive and held a boardroom shake-out to meet criticism by lessening the number of company executives on the board.

Prosecutors allege that Marsh - the world's biggest insurance broker - and other US insurance firms may have fixed bids for corporate cover.

This is the issue at the heart of the inquiry by New York's top law officer, Eliot Spitzer, and a separate prosecution of five insurers by the State of California.

The SEC's investigation into so-called related party transactions includes dealings in the Trident Funds, managed by MMC Capital, the company's private equity firm.

Marsh's new chief executive, Michael Cherkasky, is trying to negotiate a settlement with Mr Spitzer.

Mr Spitzer has built up a reputation as a fierce critic and campaigner against corporate America's misdeeds.

The uncertainty unleashed by the scandal has prompted three credit rating agencies - Standard & Poor's, Moody's and Fitch - to downgrade Marsh in recent weeks.

According to the Financial Times, insurance analysts are now questioning whether Marsh will be able to maintain its strong record of earning growth as they draw up forecasts for the first quarter of next year.

Doubts also exist over how much the company may have to pay regulators and lawyers to put the scandal behind.

Other Reports on Marsh & McLennan
Date	Issue	Company	Report
31st Jan 2005	Fraud Investigation	Marsh & McLennan	Marsh pays $850m to end charges
15th Oct 2004	Fraud Investigation	Marsh & McLennan	Corruption probe hits US insurers

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